It's the most frequent question I've been asking my Lloyd's and London market clients since the turn of the year.
The question itself is testimony to the extent of work that the market has undertaken to design, implement and embed conduct frameworks over the last few years, particularly in relation to delegated authority business. These relatively new frameworks have been working in practice for long enough for the conversation to move towards efficiency and evolution.
It is important that firms now think about how to advance their frameworks to do more of what mitigates actual conduct risk through providing value, insight and assurance, and do less activities that are time consuming and not adding value.
What needs to evolve within conduct frameworks?
I set out below some of the challenges Lloyd's and London market insurers currently have that require a more value-add and efficient solution:
Overcoming these challenges is important for conduct frameworks to become fully embedded and add value to firms. This soft market only increases the need for these frameworks to be efficient, streamlined and targeted given the current focus on cost and margin.
Role of technology in driving efficiency
A straight forward solution to remove cost and increase efficiency in conduct risk, as well as delegated authority management more broadly, is through the use of technology.
We have created DART, our Delegated Authority Risk Tool which is an online technology solution for insurance companies to undertake the end to end delegated authority framework, including conduct risk. From underwriters undertaking risk assessments on their tablets at the box, to the automated generation of targeted due diligence scopes and the analysis of dynamic MI. This solution is being...